Proactive Technologies Report – January, 2017

HAPPY NEW YEAR!

Economic Development Opportunities – An Important Incentive in Attracting Companies to Your Region

by Dean Prigelmeier, President of Proactive Technologies, Inc.

When organizations try to create new jobs in their area – working with companies that are considering moving to, expanding to or expanding within their areas – when it comes to labor availability many regional economic development strategies include an offering that consists of one part skills assessment, one part general skill classes and a sprinkling of worker tax credits or grants. That seems to be what most incentive packages include, but is that because: A) that is what the other offers look like; b) it has been like that for decades; C) it is assumed that is all that is available; or D) all of the above?

For over thirty years headlines sounded the alarm that those institutions that were training the workforce of tomorrow were not succeeding in their effort (see Proactive Technologies Report article, “An Anniversary That You Won’t Want to Celebrate: 30 Years Later and The Skill Gap Grows – Is it Finally Time to Rethink The Nation’s Approach?”). Many skilled workers that are available to work do not have the skills that employers need today. Not completely satisfied with their answer to the inevitable question regarding the region’s skilled labor availability and how workers with specific skill needs will be found or developed, some economic development organizations are exploring other options and opportunities.

It is important to understand that the types of skills that employers are most concerned with – especially employer-specific task-based skills – most likely have not been in the local workforce, nor have any programs been available in local institutions to develop them, simply because these new jobs, with new skill requirements, have never been in the area. The types of skills needed for most modern manufacturing and advanced manufacturing have never been developed because the need was not present nor the data on these jobs available. Even if the need was present, by the time the skill is recognized, a program developed and a worker completed the learning manufacturers either moved on or moved out.

Let’s face it, most organizations that promote their region for economic development do so on the current low cost of labor, right-to-work status, low business and employment tax rates, economic incentives, availability of infrastructure and quality of life. They probably never needed a system in place to develop the skills necessary to attract modern and advanced manufacturing. Companies interested only in geographical, financial and aesthetic incentives have already moved. Other employers understand that if they want higher skilled workers, they expect to pay higher wages now or later when those skill levels are reached and competition for skilled labor kicks in.

If we were honest with one another, community colleges and adult training centers are, at best, 10 -15 years behind the types of skills a prospective employee needs in order to learn and master the tasks required in modern facilities. It has always been like that, from time to time the gap surging deeper. The reason isn’t complicated; these institutions are designed as academic institutions first and have tried to fill a void in worker training with core skill development. However, they have never been embedded enough in today’s job environment to collect the job data necessary to be relevant nor have they applied the massive amount of government funding correctly to be that engaged.

“Whether attracting new companies and helping them thrive and expand, or helping existing business to do the same, this approach is an important component of any economic development strategy.”

Literally speaking, an “assessment” is the process of measuring the value, quality and/or quantity of something. There are many types of assessments, and methods for assessing. In theory, it is the process of evaluating one thing against a set of criteria to determine the match/mismatch.

There are assessments for risk, for taxes, vulnerability. There are psychological, health, and political assessments. There is a group of educational assessments that measure a variety of outcomes such as educational attainment – assessments of course content mastery, assessment of grade level attainment, assessments of Scholastic Aptitude Tests (“SAT”) that compare a student to their peers nationally and a variety of college readiness exams.

“Determining that you, indeed, hired the right person for the job will not automatically ensure the person is successful in learning and mastering the job. The most important step in the employment process is seeing to it that the individual’s core knowledge, skills and abilities are applied in learning and mastering the tasks which they were hired to perform. That is where the money is made.”

Educational assessments have been adapted for use in workforce development and employment, used to assess a prospective employee’s suitability for a job opening. They often measure more of what, if anything, a student learned and retained before graduating than how they match the employer’s actual job opening. Psychological assessments have been adapted to measure a prospective employee’s sociability to the workplace, morphing into a new category called “psychometric assessments.”

We have seen a growth in the employment assessment industry over the past 2 decades – particularly after 9-11. There are assessments for cognitive tests, physical abilities, “trustworthiness,” credit history, personality, criminal background and more. When used improperly, the methods have been challenged in court for their appropriateness and intent.

An assessment is a “test,” and has been held as such by court rulings over the years. Read More

An Anniversary That You Won’t Want to Celebrate: 30 Years Later and The Skill Gap Grows – Is it Finally Time to Rethink The Nation’s Approach?

by Dean Prigelmeier, President of Proactive Technologies, Inc.

Albert Einstein is credited with saying, “Insanity: doing the same thing over and over again and expecting different results.” It is not sure if that includes instances where the packaging has been changed but the process is basically the same. But I think we all feel, at times, a little like Bill Murray’s character in the movie “Groundhog Day” when it comes to skill gaps and worker training.

Proactive Technologies, Inc. was started in June of 1986 to address a critical need seen developing at the time. In the mid-1980’s, the addition of computers and microprocessors began to accelerate the automation of manufacturing and change the nature of work – sometimes in subtle ways, sometimes profound. Since this movement was in its infancy, it was difficult to predict its many directions and full impact. However, it was not hard to imagine that this was going to have a major impact on the nature of future work and, therefore, the way in which employers and education developed workers.

Leading up to this, while working in certification program development, training program development and quality engineering for manufacturers, I found that the traditional, academic approaches to job training were beginning to lose their effectiveness in the workplace. Even the techniques for developing training materials was no longer suited for a job classification that may have significant changes to it weekly. Rapid job changes affected job descriptions, hiring assessments, performance appraisals – impairing an employer’s efforts to remain compliant with Equal Employment Opportunity Commission regulation. Establishing certifications for workers was impossible since the training that led into it, and even the materials used for hiring a candidate, grew quickly obsolete. Evaluating worker performance was being reduced to subjective generalities, often generating resentment from workers and those that evaluated them.

“It was not then, and is not today, uncommon for a displaced worker to bear the cost of a 2-year vocational program for a job that was there when the program started but not there when completed – a waste of time, money, opportunity and hope.”

Training materials and certification standards were difficult to develop and maintain to a moving target, and therefore often conflicts arose with engineering processes, and safety and quality compliance policies of the organization. Employers did not have the luxury to allow 6-8 months for the development of a training manual for just a part of the job, only to discover that 60% of it was obsolete when put into use.

The warnings went out, although more directed at the symptoms of the problem then the problem itself.

“By 1990, an estimated three out of four jobs will require some education or technical training beyond high school” … “Workers with critical technical skills will be retiring at an increasingly rapid rate. For example, the average of the nation’s 300,000 machinists is 58, yet the industry is training only one-forth of the skilled machinists needed each year.”

Employment Policies:

Looking to the Year 2000

National Alliance of Business, 1986

“Some companies have calculated that the “occupational half-life*” of an employee has declined, on average, from 7-14 years to 3-5 years.”

* Length of time necessary for 1/2 of the employee – held knowledge, skills and abilities for competent performance (for the job classification originally hired) to become relatively obsolete.

Michigan Industrial Technology Institute, 1987

“Nearly $30 billion is spent on employee training each year in the United States…and most of that money goes to waste.”

Fran Tarkenton, Management Consultant

Training Magazine, November 1988

“Employers spent an estimated $30 billion last year on training, but some observers feel much of that outlay was wasted. If businesses want to get a bigger bang for their buck in the 90s, they have to make changes.”

Noel Tichy, University of Michigan

Human Resource Executive, October 1988

Yet, technological advances were not the only threat to the once considered stable practice of worker development. In the 1970’s, America’s reaction to the skill gap was to begin outsourcing the production of entire industries – exchanging declining worker capacity with lower-waged labor…with even lower capacity. First, the steel industry took a hit and entire towns were devastated when the main industry that sustained the economy was dismantled and reassembled in lower-wage countries that minimized their own worker protections, environmental regulations, government taxation and oversight to attract the industry…in some cases incentivized directly or indirectly by our own government.

Next it was the electronics industry in the 1980’s. Again, entire communities who relied on the stability of well-paying jobs for their tax base and economic activity were left ravaged as citizens tried to first understand what happened to them, and then tried to figure out a way forward for themselves, their family and the community.

Each time this upheaval occurred the call by public officials was the same, “we need to train workers for the jobs of tomorrow”…”the old skills will not be effective in the new economy”…”America has to reinvent itself.” Federal and state government agencies responded to the crisis in a predictable way…more money to the same institutions to increase their capacity to train workers (without changing how they did that). And each time employers responded by spending more money to train workers because the institutions were not delivering what they needed. Read More

Changes in ISO 9001: 2015 and Any Effects on Worker Training

by Dean Prigelmeier, President of Proactive Technologies, Inc.

The new standard ISO 9001: 2015 took effect September 15th, 2015. A transition period of three years will allow affected departments to make the necessary adjustments, but Quality Management Certificates issued under the old standard, ISO 9001: 2008, will have to include the new date.

Re-certification audit planning for the new standard must be performed at least 90 days prior to expiration, in other words by September 14, 2018, and the last audit day cannot exceed the deadline or a full, initial audit must be performed.

The new standard includes a couple of changes that make the new standard easier to implement with other management systems, and focuses more on management commitment and performance and less on prescriptive measures. The standard has a new structure called a “High Level Structure” and introduces the concept of “risk-based thinking.” The emphasis is on organizations identifying risks to standardize quality performance and taking measures to “ensure their management system can achieve its intended outcomes, prevent or reduce undesired effects and achieve continual improvement.” The revised standard also puts increased emphasis on achieving value for the organization and its customers; in other words “output matters.”

The process approach introduced in 2000 as the desired model for quality management systems will become an explicit requirement of ISO 9001: 2015. The standard requires understanding the needs of the clients or customers, end users, suppliers and regulators and the words “document” and “record” were replaced by “documented information,” acknowledging the need to broaden the concept in recognition of the advancement in information handling technology.

The new standard has more emphasis on requirements for competent performance of personnel, competence meaning “being able to apply knowledge and skill to achieve intended results.” The important role that structured on-the-job training has played so far in ISO/AS/TS compliance now becomes even more critical.